The Motley Fool

Forget Bitcoin! I’d aim to retire rich with these investments instead

I wrote earlier this year about Bitcoin staging a dramatic recovery and discussed whether it represented a value investment as it breached £10,000 per coin again in July.

I was highly sceptical about the long-term prospects of Bitcoin due to its inherent volatility and lack of regulation. My scepticism has been compounded by reports this week that one solitary trader could have been behind the surge that led Bitcoin to highs of nearly £14,000 in 2017.

Claim your FREE copy of The Motley Fool’s Bear Market Survival Guide.

Global stock markets may be reeling from the coronavirus, but you don’t have to face this down market alone. Help yourself to a FREE copy of The Motley Fool’s Bear Market Survival Guide and discover the five steps you can take right now to try and bolster your portfolio… including how you can aim to turn today’s market uncertainty to your advantage. Click here to claim your FREE copy now!

The lack of any underlying assets to back up the cryptocurrency means that the price is solely driven by what an investor is willing to pay for it – not ideal as a long-term investment strategy.

If I was looking towards retirement in the hope of having a pretty sum to look forward to, I don’t think Bitcoin is the way to go.

Long-term outlook

There are a number of other investments that I believe will significantly outperform Bitcoin in the long run – I would focus on blue-chip stocks that have established businesses and cash assets behind them.

A great way to get started with stocks and shares is to look at tracker funds rather than attempting to pick individual companies to outperform the market.

Index tracker funds allow the investor to closely track the performance of a given index, or group of stocks, such as the UK’s FTSE 100.

Stocks and shares from the Footsie index are some of the most well-established and reputable companies in the world, and I’d back the majority of them to outperform Bitcoin in the long run.

Instant diversification

These types of investments are popular for a number of reasons, particularly for beginner investors as they limit exposure to single sectors and give you variety.

That said, when you buy tracker funds as an investor you will only reap the benefit of overall growth of the companies contained in the index, rather than any spectacular dividends paid out by individual firms. Even so, I still see them as a solid investment, particularly those which track some of the world’s major markets.

Despite the ongoing uncertainty caused by Brexit and the potential knock-on effects for the UK economy, it’s my view that the FTSE 100 will provide attractive returns as a long-term play.

Expecting to grow your portfolio massively over the next year or two is highly unlikely when looking at stocks and shares – particularly for tracker funds. However, when looking at a 10–20 year investment, historical performance suggests the FTSE 100 and other blue-chip stock indices will provide healthy returns.

If I had invested in a FTSE 100 index tracker 10 years ago today, I’d be looking at growth of around 40% – not a bad return for a highly diversified ready-made portfolio.

As well as UK indices, other international market trackers could also represent a sound retirement investment, including the likes of the S&P 500 in the US. With a long-term investment outlook as a starting point, the market should look after the rest.

You Really Could Make A Million

Of course, picking the right shares and the strategy to be successful in the stock market isn't easy. But you can get ahead of the herd by reading the Motley Fool's FREE guide, “10 Steps To Making A Million In The Market”.

The Motley Fool's experts show how a seven-figure-sum stock portfolio is within the reach of many ordinary investors in this straightforward step-by-step guide.

Simply click here for your free copy.

conorcoyle has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.